Warrior Met Coal Announces Second Quarter 2019 Results
Warrior Met Coal, Inc. (NYSE:HCC) (“Warrior” or the “Company”) today announced results for the second quarter of 2019. Warrior is the leading dedicated U.S. based producer and exporter of high quality metallurgical (“met”) coal for the global steel industry.
Warrior reported second quarter 2019 net income of $125.5 million, or $2.43 per diluted share, compared to net income of $91.3 million, or $1.72 per diluted share, in the second quarter of 2018. Adjusted net income per share for the second quarter of 2019 was $2.16 per diluted share compared to $1.81 per diluted share in the second quarter of 2018. The Company reported Adjusted EBITDA of $175.9 million in the second quarter of 2019, compared to Adjusted EBITDA of $128.8 million in the second quarter of 2018.
“The market for Warrior's high quality met coal remained strong in the second quarter, helping us to achieve record high sales volume and free cash flow, despite softening demand for steel in Europe,” Warrior CEO Walt Scheller said. “We are pleased to have maintained our high production volume and completed one longwall move during the quarter, enabling us to increase our full-year sales and production guidance. Our strong results this quarter reflect our disciplined spending as well as efforts to take advantage of the pricing environment, which remained favorable during most of the quarter.”
Operating Results
The Company produced 2.2 million short tons of met coal in the second quarter of 2019, 13.8% more than the amount produced in the second quarter of 2018. Sales volume in the second quarter of 2019 was 2.2 million short tons, an 18.8% increase over the amount sold in the second quarter of 2018.
Additional Financial Results
Total revenues were $397.6 million for the second quarter of 2019, including $387.4 million in mining revenues, which consisted of met coal sales of 2.2 million short tons at an average net selling price of $172.96 per short ton, net of demurrage and other charges. Total revenues increased 22.9% from $322.6 million in the second quarter of 2018. Warrior continued to capitalize on a favorable pricing environment in the quarter by selling its met coal at 97% of the quarterly Australian premium low-volatility hard coking coal (“HCC”) index average price (the “Australian LV Index”).
Cost of sales (includes mining, transportation and royalty costs) for the second quarter of 2019 were $205.2 million, or 52.9% of mining revenues, compared to $178.5 million, or 56.7% of mining revenues in the same period of 2018. Cash cost of sales (free-on-board port) per short ton decreased to $91.30 in the second quarter of 2019 from $93.90 in the second quarter of 2018, primarily due to higher production volume and lower spending.
Selling, general and administrative expenses for the second quarter of 2019 were $10.8 million, or 2.7% of total revenues. Depreciation and depletion costs for the second quarter of 2019 were $25.7 million, or 6.5% of total revenues. Warrior incurred interest expense, net of $7.0 million during the second quarter of 2019, reflecting lower interest due to the early retirement of a portion of our debt in the first quarter of 2019.
Income tax expense was $33.1 million in the second quarter of 2019 and represents a noncash expense as the Company continues to utilize its available net operating losses ("NOL") carried forward from prior periods. The Company did not have income tax expense in the second quarter of 2018 due to a full valuation allowance recorded against deferred income taxes.
Cash Flow and Liquidity
The Company continued to generate strong cash flows from operating activities in the second quarter of 2019 of $231.4 million compared to $132.5 million in the second quarter of 2018. Warrior's cash flows benefited from other income of $17.5 million due to unexpected proceeds received from a settlement with Walter Energy Canada Holdings, Inc., Walter Canadian Coal Partnership and their Canadian affiliates in the Companies’ Creditors Arrangement Act proceedings.
Net working capital, excluding cash, for the second quarter of 2019 decreased by $39.1 million from the first quarter of 2019, primarily reflecting a decrease in trade accounts receivable due to timing of receipts and a decrease in income tax receivable due to the receipt of AMT credit refunds. Capital expenditures and mine development costs for the second quarter of 2019 were $34.2 million, resulting in a record high free cash flow of $197.2 million. Free cash flow increased 97.9% from $99.6 million in the second quarter of 2018. Cash flows used in financing activities for the second quarter were $238.9 million primarily due to the payment of the special dividend of $230.0 million.
The Company’s available liquidity as of June 30, 2019 was $235.4 million, consisting of cash and cash equivalents of $119.3 million combined with $116.1 million available under its Amended and Restated Asset-Based Revolving Credit Agreement (the "ABL Facility"), net of outstanding letters of credit of $8.9 million.
Regular Quarterly Dividend
On July 23, 2019, the Board declared a regular quarterly cash dividend of $0.05 per share, totaling approximately $2.6 million, which will be paid on August 9, 2019 to stockholders of record as of the close of business on August 2, 2019.
Company Outlook
In light of the Company's successful performance in the first and second quarters of 2019 and the expected market conditions for the remainder of 2019, Warrior updated its outlook for sales and production and noncash deferred income tax expense for the full year 2019 as outlined below. The Company is maintaining its guidance with respect to the other financial statement line items for the full year 2019 as outlined below.
Coal sales |
7.5 - 7.9 million short tons |
Coal production |
7.5 - 7.9 million short tons |
Cash cost of sales (free-on-board port) |
$89 - $95 per short ton |
Capital expenditures |
$100 - $120 million |
Mine development costs |
$18 - $22 million |
Selling, general and administrative expenses |
$32 - $36 million |
Interest expense, net |
$30 - $32 million |
Noncash deferred income tax expense |
20% - 23% |
Cash tax rate |
0% |
Key factors that may affect outlook include:
- Planned longwall moves (2 - Q3, and 1 - Q4)
- HCC index pricing
- Exclusion of other non-recurring costs
The Company’s guidance for its capital expenditures consists of sustaining capital spending of approximately $70 - $87 million, including regulatory and gas requirements, and discretionary capital spending of $30 - $33 million for various operational improvements.
The Company does not provide reconciliations of its outlook for cash cost of sales (free-on-board port) to cost of sales in reliance on the unreasonable efforts exception provided for under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable, without unreasonable efforts, to forecast certain items required to develop the meaningful comparable Generally Accepted Accounting Principles ("GAAP") cost of sales. These items typically include non-cash asset retirement obligation accretion expenses, mine idling expenses and other non-recurring indirect mining expenses that are difficult to predict in advance in order to include a GAAP estimate.
Use of Non-GAAP Financial Measures
This release contains the use of certain U.S. non-GAAP financial measures. These non-GAAP financial measures are provided as supplemental information for financial measures prepared in accordance with GAAP. Management believes that these non-GAAP financial measures provide additional insights into the performance of the Company, and they reflect how management analyzes Company performance and compares that performance against other companies. These non-GAAP financial measures may not be comparable to other similarly titled measures used by other entities. The definition of these non-GAAP financial measures and a reconciliation of non-GAAP to GAAP financial measures is provided in the financial tables section of this release.
Conference Call
The Company will hold a conference call to discuss its second quarter 2019 results today, July 31, 2019, at 4:30 p.m. ET. To listen to the event live or access an archived recording, please visit http://investors.warriormetcoal.com/. Analysts and investors who would like to participate in the conference call should dial 1-844-340-9047 (domestic) or 1-412-858-5206 (international) 10 minutes prior to the start time and reference the Warrior Met Coal conference call. Telephone playback will also be available from 6:30 p.m. ET July 31, 2019 until 6:30 p.m. ET on August 7, 2019. The replay will be available by calling: 1-877-344-7529 (domestic) or 1-412-317-0088 (international) and entering passcode 10132099.
About Warrior
Warrior is a large-scale, low-cost, U.S.-based producer and exporter of premium HCC, operating highly efficient longwall operations in its underground mines located in Alabama. The HCC that Warrior produces from the Blue Creek coal seam contains very low sulfur and has strong coking properties and is of a similar quality to coal referred to as the premium HCC produced in Australia. The premium nature of Warrior’s HCC makes it ideally suited as a base feed coal for steel makers and results in price realizations near the Australian LV Index. Warrior sells all its met coal production to steel producers in Europe, South America and Asia. For more information about Warrior, please visit www.warriormetcoal.com.
Forward-Looking Statements
This press release contains, and the Company’s officers and representatives may from time to time make, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements, including statements regarding 2019 guidance, sales and production growth, ability to maintain cost structure, demand, the future direction of prices, expected capital expenditures and future effective income tax rates. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “project,” “target,” “foresee,” “should,” “would,” “could,” “potential,” or “outlook,” “guidance” or other similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements represent management’s good faith expectations, projections, guidance or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, without limitation, fluctuations or changes in the pricing or demand for the Company’s coal (or met coal generally) by the global steel industry; federal and state tax legislation; changes in interpretation or assumptions and/or updated regulatory guidance regarding the Tax Cuts and Jobs Act of 2017; legislation and regulations relating to the Clean Air Act and other environmental initiatives; regulatory requirements associated with federal, state and local regulatory agencies, and such agencies’ authority to order temporary or permanent closure of the Company’s mines; operational, logistical, geological, permit, license, labor and weather-related factors, including equipment, permitting, site access, operational risks and new technologies related to mining; the timing and impact of planned longwall moves; the Company’s obligations surrounding reclamation and mine closure; inaccuracies in the Company’s estimates of its met coal reserves; any projections or estimates regarding Blue Creek, including whether this project is developed and, if it is, the possible returns from this project, the Company's expectations regarding its future tax rate as well as its ability to effectively utilize its NOLs; the Company’s ability to develop or acquire met coal reserves in an economically feasible manner; significant cost increases and fluctuations, and delay in the delivery of raw materials, mining equipment and purchased components; competition and foreign currency fluctuations; fluctuations in the amount of cash the Company generates from operations, including cash necessary to pay any special or quarterly dividend or the timing and amount of any stock repurchases the Company makes under its stock repurchase program; the Company’s ability to comply with covenants in its ABL Facility or indenture relating to its senior secured notes; integration of businesses that the Company may acquire in the future; adequate liquidity and the cost, availability and access to capital and financial markets; failure to obtain or renew surety bonds on acceptable terms, which could affect the Company’s ability to secure reclamation and coal lease obligations; costs associated with litigation, including claims not yet asserted; and other factors described in the Company’s Form 10-K for the year ended December 31, 2018 and other reports filed from time to time with the Securities and Exchange Commission (the “SEC”), which could cause the Company’s actual results to differ materially from those contained in any forward-looking statement. The Company’s filings with the SEC are available on its website at www.warriormetcoal.com and on the SEC's website at www.sec.gov.
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict all such factors.
WARRIOR MET COAL, INC.
(Unaudited) |
|||||||||||||||
|
|||||||||||||||
|
For the three months ended June 30, |
|
For the six months ended June 30, |
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Revenues: |
|
|
|
|
|
|
|
||||||||
Sales |
$ |
387,429 |
|
|
$ |
315,045 |
|
|
$ |
757,110 |
|
|
$ |
727,924 |
|
Other revenues |
10,184 |
|
|
7,510 |
|
|
18,793 |
|
|
16,419 |
|
||||
Total revenues |
397,613 |
|
|
322,555 |
|
|
775,903 |
|
|
744,343 |
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of sales (exclusive of items shown separately below) |
205,188 |
|
|
178,543 |
|
|
387,816 |
|
|
369,219 |
|
||||
Cost of other revenues (exclusive of items shown separately below) |
8,019 |
|
|
7,338 |
|
|
15,764 |
|
|
15,122 |
|
||||
Depreciation and depletion |
25,678 |
|
|
21,127 |
|
|
47,911 |
|
|
45,679 |
|
||||
Selling, general and administrative |
10,783 |
|
|
13,465 |
|
|
19,688 |
|
|
21,699 |
|
||||
Transaction and other expenses |
— |
|
|
986 |
|
|
— |
|
|
4,274 |
|
||||
Total costs and expenses |
249,668 |
|
|
221,459 |
|
|
471,179 |
|
|
455,993 |
|
||||
Operating income |
147,945 |
|
|
101,096 |
|
|
304,724 |
|
|
288,350 |
|
||||
Interest expense, net |
(6,951 |
) |
|
(9,784 |
) |
|
(15,543 |
) |
|
(18,344 |
) |
||||
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
(9,756 |
) |
|
— |
|
||||
Other income |
17,543 |
|
|
— |
|
|
17,543 |
|
|
— |
|
||||
Income before income tax expense |
158,537 |
|
|
91,312 |
|
|
296,968 |
|
|
270,006 |
|
||||
Income tax expense |
33,056 |
|
|
— |
|
|
61,040 |
|
|
— |
|
||||
Net income |
$ |
125,481 |
|
|
$ |
91,312 |
|
|
$ |
235,928 |
|
|
$ |
270,006 |
|
Basic and diluted net income per share: |
|
|
|
|
|
|
|
||||||||
Net income per share—basic |
$ |
2.43 |
|
|
$ |
1.72 |
|
|
$ |
4.58 |
|
|
$ |
5.10 |
|
Net income per share—diluted |
$ |
2.43 |
|
|
$ |
1.72 |
|
|
$ |
4.57 |
|
|
$ |
5.09 |
|
Weighted average number of shares outstanding—basic |
51,553 |
|
|
53,053 |
|
|
51,532 |
|
|
52,976 |
|
||||
Weighted average number of shares outstanding—diluted |
51,681 |
|
|
53,079 |
|
|
51,641 |
|
|
53,007 |
|
||||
Dividends per share: |
$ |
4.46 |
|
|
$ |
6.58 |
|
|
$ |
4.51 |
|
|
$ |
6.63 |
|
WARRIOR MET COAL, INC. |
|||||||||||||||
QUARTERLY SUPPLEMENTAL FINANCIAL DATA AND |
|||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|||||||||||||||
QUARTERLY SUPPLEMENTAL FINANCIAL DATA: |
|||||||||||||||
|
|||||||||||||||
|
For the three months ended June 30, |
|
For the six months ended June 30, |
||||||||||||
(short tons in thousands)(1) |
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Tons sold |
2,240 |
|
|
1,886 |
|
|
4,335 |
|
|
4,002 |
|
||||
Tons produced |
2,195 |
|
|
1,929 |
|
|
4,494 |
|
|
4,027 |
|
||||
Gross price realization (2) |
97 |
% |
|
100 |
% |
|
97 |
% |
|
99 |
% |
||||
Average net selling price |
$ |
172.96 |
|
|
$ |
167.04 |
|
|
$ |
174.65 |
|
|
$ |
181.89 |
|
Cash cost of sales (free on board port) per short ton (3) |
$ |
91.30 |
|
|
$ |
93.90 |
|
|
$ |
89.14 |
|
|
$ |
91.74 |
|
(1) 1 short ton is equivalent to 0.907185 metric tons.
(2) For the three months ended March 31, 2019 and 2018, our gross price realization represents a volume weighted-average calculation of our daily realized price per ton based on gross sales, which excludes demurrage and other charges, as a percentage of the Platts Index.
RECONCILIATION OF CASH COST OF SALES (FREE-ON-BOARD PORT) TO COST OF SALES REPORTED UNDER U.S. GAAP: |
|||||||||||||||
(in thousands) |
For the three months ended June 30, |
|
For the six months ended June 30, |
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Cost of sales |
$ |
205,188 |
|
|
$ |
178,543 |
|
|
$ |
387,816 |
|
|
$ |
369,219 |
|
Asset retirement obligation |
(373 |
) |
|
(560 |
) |
|
(746 |
) |
|
(1,120 |
) |
||||
Stock compensation expense |
(308 |
) |
|
(879 |
) |
|
(627 |
) |
|
(946 |
) |
||||
Cash cost of sales (free-on-board port)(3) |
$ |
204,507 |
|
|
$ |
177,104 |
|
|
$ |
386,443 |
|
|
$ |
367,153 |
|
(3) Cash cost of sales (free-on-board port) is based on reported cost of sales and includes items such as freight, royalties, labor, fuel and other similar production and sales cost items, and may be adjusted for other items that, pursuant to GAAP, are classified in the Condensed Statements of Operations as costs other than cost of sales, but relate directly to the costs incurred to produce met coal. Our cash cost of sales per short ton is calculated as cash cost of sales divided by the short tons sold. Cash cost of sales per short ton is a non-GAAP financial measure which is not calculated in conformity with U.S. GAAP and should be considered supplemental to, and not as a substitute or superior to financial measures calculated in conformity with GAAP. We believe cash cost of sales per ton is a useful measure of performance and we believe it aids some investors and analysts in comparing us against other companies to help analyze our current and future potential performance. Cash cost of sales per ton may not be comparable to similarly titled measures used by other companies.
WARRIOR MET COAL, INC.
|
|||||||||||||||
|
|||||||||||||||
RECONCILIATION OF ADJUSTED EBITDA TO AMOUNTS REPORTED UNDER U.S. GAAP: |
|||||||||||||||
|
|||||||||||||||
|
For the three months ended June 30, |
|
For the six months ended June 30, |
||||||||||||
(in thousands) |
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Net income |
$ |
125,481 |
|
|
$ |
91,312 |
|
|
$ |
235,928 |
|
|
$ |
270,006 |
|
Interest expense, net |
6,951 |
|
|
9,784 |
|
|
15,543 |
|
|
18,344 |
|
||||
Income tax expense |
33,056 |
|
|
— |
|
|
61,040 |
|
|
— |
|
||||
Depreciation and depletion |
25,678 |
|
|
21,127 |
|
|
47,911 |
|
|
45,679 |
|
||||
Asset retirement obligation |
812 |
|
|
1,155 |
|
|
1,624 |
|
|
2,310 |
|
||||
Stock compensation expense |
1,455 |
|
|
4,481 |
|
|
2,649 |
|
|
4,679 |
|
||||
Transaction and other expenses |
— |
|
|
986 |
|
|
— |
|
|
4,274 |
|
||||
Loss on early extinguishment of debt |
— |
|
|
— |
|
|
9,756 |
|
|
— |
|
||||
Other income |
(17,543 |
) |
|
— |
|
|
(17,543 |
) |
|
$ |
— |
|
|||
Adjusted EBITDA (4) |
$ |
175,890 |
|
|
$ |
128,845 |
|
|
$ |
356,908 |
|
|
$ |
345,292 |
|
Adjusted EBITDA margin (5) |
44.2 |
% |
|
39.9 |
% |
|
46.0 |
% |
|
46.4 |
% |
||||
(4) Adjusted EBITDA is defined as net income before net interest expense, income tax expense, depreciation and depletion, non-cash asset retirement obligation accretion, non-cash stock compensation expense, transaction and other expenses, loss on early extinguishment of debt and other income. Adjusted EBITDA is not a measure of financial performance in accordance with GAAP, and we believe items excluded from Adjusted EBITDA are significant to a reader in understanding and assessing our financial condition. Therefore, Adjusted EBITDA should not be considered in isolation, nor as an alternative to net income, income from operations, cash flows from operations or as a measure of our profitability, liquidity or performance under GAAP. We believe that Adjusted EBITDA presents a useful measure of our ability to incur and service debt based on ongoing operations. Furthermore, analogous measures are used by industry analysts to evaluate our operating performance. Investors should be aware that our presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
(5) Adjusted EBITDA margin is defined as Adjusted EBITDA divided by total revenues.
RECONCILIATION OF ADJUSTED NET INCOME TO AMOUNTS REPORTED UNDER U.S. GAAP: |
|||||||||||||||
(in thousands, except per share amounts) |
For the three months ended June 30, |
|
For the six months ended June 30, |
||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
Net income |
$ |
125,481 |
|
|
$ |
91,312 |
|
|
$ |
235,928 |
|
|
$ |
270,006 |
|
Incremental stock compensation expense |
— |
|
|
3,570 |
|
|
— |
|
|
3,570 |
|
||||
Transaction and other expenses, net of tax |
— |
|
|
986 |
|
|
— |
|
|
4,274 |
|
||||
Loss on early extinguishment of debt, net of tax |
— |
|
|
— |
|
|
9,756 |
|
|
— |
|
||||
Other income, net of tax |
(13,885 |
) |
|
— |
|
|
(13,937 |
) |
|
— |
|
||||
Adjusted net income (6) |
$ |
111,596 |
|
|
$ |
95,868 |
|
|
$ |
231,747 |
|
|
$ |
277,850 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of basic shares outstanding |
51,553 |
|
|
53,053 |
|
|
51,532 |
|
|
52,976 |
|
||||
Weighted average number of diluted shares outstanding |
51,681 |
|
|
53,079 |
|
|
51,641 |
|
|
53,007 |
|
||||
|
|
|
|
|
|
|
|
||||||||
Adjusted basic net income per share: |
$ |
2.16 |
|
|
$ |
1.81 |
|
|
$ |
4.50 |
|
|
$ |
5.24 |
|
Adjusted diluted net income per share: |
$ |
2.16 |
|
|
$ |
1.81 |
|
|
$ |
4.49 |
|
|
$ |
5.24 |
|
(6) Adjusted net income is defined as net income net of incremental stock compensation expense, transaction and other expenses, loss on early extinguishment of debt and other income, net of tax (based on each respective period's effective tax rate). Adjusted net income is not a measure of financial performance in accordance with GAAP, and we believe items excluded from adjusted net income are significant to the reader in understanding and assessing our results of operations. Therefore, adjusted net income should not be considered in isolation, nor as an alternative to net income under GAAP. We believe adjusted net income is a useful measure of performance and we believe it aids some investors and analysts in comparing us against other companies to help analyze our current and future potential performance. Adjusted net income may not be comparable to similarly titled measures used by other companies.
WARRIOR MET COAL, INC.
|
|||||||||||||||||||
|
|||||||||||||||||||
|
For the three months ended June 30, |
|
For the six months ended June 30, |
||||||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||||
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
||||||||||||
Net income |
$ |
|
125,481 |
|
|
$ |
|
91,312 |
|
|
$ |
|
235,928 |
|
|
$ |
|
270,006 |
|
Non-cash adjustments to reconcile net income to net cash provided by operating activities |
|
61,230 |
|
|
|
27,521 |
|
|
|
123,590 |
|
|
|
54,064 |
|
||||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
||||||||||||
Trade accounts receivable |
|
21,894 |
|
|
|
22,379 |
|
|
|
(22,435 |
) |
|
|
(12,200 |
) |
||||
Income tax receivable |
|
21,310 |
|
|
— |
|
|
|
21,607 |
|
|
— |
|
||||||
Inventories |
|
190 |
|
|
|
(7,174 |
) |
|
|
(10,633 |
) |
|
|
(5,390 |
) |
||||
Prepaid expenses and other receivables |
|
(1,657 |
) |
|
|
941 |
|
|
|
8,510 |
|
|
|
12,834 |
|
||||
Accounts payable |
|
(4,821 |
) |
|
|
12,538 |
|
|
|
5,819 |
|
|
|
15,469 |
|
||||
Accrued expenses and other current liabilities |
|
2,165 |
|
|
|
(12,671 |
) |
|
|
(12,968 |
) |
|
|
(3,723 |
) |
||||
Other |
|
5,638 |
|
|
|
(2,326 |
) |
|
|
8,420 |
|
|
|
(4,803 |
) |
||||
Net cash provided by operating activities |
|
231,430 |
|
|
|
132,520 |
|
|
|
357,838 |
|
|
|
326,257 |
|
||||
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
||||||||||||
Purchases of property, plant, and equipment, and other |
|
(27,705 |
) |
|
|
(32,877 |
) |
|
|
(52,100 |
) |
|
|
(55,419 |
) |
||||
Mine development costs |
|
(6,491 |
) |
|
— |
|
|
|
(12,069 |
) |
|
— |
|
||||||
Proceeds from sale of property, plant and equipment |
|
2,829 |
|
|
— |
|
|
|
3,063 |
|
|
— |
|
||||||
Other |
|
3,251 |
|
|
— |
|
|
|
3,251 |
|
|
— |
|
||||||
Net cash used in investing activities |
|
(28,116 |
) |
|
|
(32,877 |
) |
|
|
(57,855 |
) |
|
|
(55,419 |
) |
||||
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
||||||||||||
Net cash used in financing activities |
|
(238,911 |
) |
|
|
(366,582 |
) |
|
|
(386,243 |
) |
|
|
(251,189 |
) |
||||
Net increase (decrease) in cash and cash equivalents and restricted cash |
|
(35,597 |
) |
|
|
(266,939 |
) |
|
|
(86,260 |
) |
|
|
19,649 |
|
||||
Cash and cash equivalents and restricted cash at beginning of period |
|
155,742 |
|
|
|
322,852 |
|
|
|
206,405 |
|
|
|
36,264 |
|
||||
Cash and cash equivalents and restricted cash at end of period |
$ |
|
120,145 |
|
|
$ |
|
55,913 |
|
|
$ |
|
120,145 |
|
|
$ |
|
55,913 |
|
RECONCILIATION OF FREE CASH FLOW TO AMOUNTS REPORTED UNDER U.S. GAAP: |
|||||||||||||||||||
(in thousands) |
For the three months ended June 30, |
|
For the six months ended June 30, |
||||||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||||
Net cash provided by operating activities |
$ |
|
231,430 |
|
|
$ |
|
132,520 |
|
|
$ |
|
357,838 |
|
|
$ |
|
326,257 |
|
Purchases of property, plant and equipment and mine development costs |
|
(34,196 |
) |
|
|
(32,877 |
) |
|
|
(64,169 |
) |
|
|
(55,419 |
) |
||||
Free cash flow (7) |
$ |
|
197,234 |
|
|
$ |
|
99,643 |
|
|
$ |
|
293,669 |
|
|
$ |
|
270,838 |
|
Free cash flow conversion (8) |
|
112.1 |
% |
|
|
77.3 |
% |
|
|
82.3 |
% |
|
|
78.4 |
% |
||||
(7) Free cash flow is defined as net cash provided by operating activities less purchases of property, plant and equipment and mine development costs. Free cash flow is not a measure of financial performance in accordance with GAAP, and we believe items excluded from net cash provided by operating activities are significant to the reader in understanding and assessing our results of operations. Therefore, free cash flow should not be considered in isolation, nor as an alternative to net cash provided by operating activities under GAAP. We believe free cash flow is a useful measure of performance and we believe it aids some investors and analysts in comparing us against other companies to help analyze our current and future potential performance. Free cash flow may not be comparable to similarly titled measures used by other companies.
(8) Free cash flow conversion defined as free cash flow divided by Adjusted EBITDA.
WARRIOR MET COAL, INC.
|
||||||||
|
||||||||
|
|
June 30, 2019 (Unaudited) |
|
December 31,
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
119,318 |
|
|
$ |
205,577 |
|
Short-term investments |
|
14,250 |
|
|
17,501 |
|
||
Trade accounts receivable |
|
160,834 |
|
|
138,399 |
|
||
Income tax receivable |
|
10,655 |
|
|
21,607 |
|
||
Inventories, net |
|
69,234 |
|
|
56,719 |
|
||
Prepaid expenses and other receivables |
|
26,485 |
|
|
29,366 |
|
||
Total current assets |
|
400,776 |
|
|
469,169 |
|
||
Mineral interests, net |
|
114,951 |
|
|
120,427 |
|
||
Property, plant and equipment, net |
|
582,560 |
|
|
540,315 |
|
||
Deferred income taxes |
|
161,826 |
|
|
222,780 |
|
||
Non-current income tax receivable |
|
10,655 |
|
|
21,310 |
|
||
Other long-term assets |
|
19,710 |
|
|
21,039 |
|
||
Total assets |
|
$ |
1,290,478 |
|
|
$ |
1,395,040 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
36,467 |
|
|
$ |
33,588 |
|
Accrued expenses |
|
70,742 |
|
|
82,342 |
|
||
Short term financing lease liabilities |
|
8,659 |
|
|
— |
|
||
Other current liabilities |
|
5,389 |
|
|
7,742 |
|
||
Current portion of long-term debt |
|
— |
|
|
760 |
|
||
Total current liabilities |
|
121,257 |
|
|
124,432 |
|
||
Long-term debt |
|
338,854 |
|
|
468,231 |
|
||
Asset retirement obligations |
|
60,356 |
|
|
59,049 |
|
||
Long term financing lease liabilities |
|
31,166 |
|
|
— |
|
||
Other long-term liabilities |
|
26,187 |
|
|
30,716 |
|
||
Total liabilities |
|
577,820 |
|
|
682,428 |
|
||
Stockholders’ Equity: |
|
|
|
|
||||
Common stock, $0.01 par value per share (Authorized -140,000,000 shares as of June 30, 2019 and December 31, 2018, 53,292,751 issued and 51,570,910 outstanding as of June 30, 2019 and 53,256,098 issued and 51,622,898 outstanding as of December 31, 2018) |
|
533 |
|
|
533 |
|
||
Preferred stock, $0.01 par value per share (10,000,000 shares authorized, no shares issued and outstanding) |
|
— |
|
|
— |
|
||
Treasury stock, at cost (1,721,841 and 1,633,200 shares as of June 30, 2019 and December 31, 2018) |
|
(40,000 |
) |
|
(38,030 |
) |
||
Additional paid in capital |
|
241,020 |
|
|
239,827 |
|
||
Retained earnings |
|
511,105 |
|
|
510,282 |
|
||
Total stockholders’ equity |
|
712,658 |
|
|
712,612 |
|
||
Total liabilities and stockholders’ equity |
|
$ |
1,290,478 |
|
|
$ |
1,395,040 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190731005188/en/
